Ramahari Pradhan and Another vs Bijaya Kumar Mohapatra and Others

R.K. Patra. J.

A learned Single Judge of this Court while hearing this appeal felt that the following question :

''''Whether the Insurance policy with the original owner will lapse under the old Act as well as under the new Act in the event of transfer of the vehicle without notice to the Insurance Company or the Insurance Company will still be made liable to indemnify the subsequent purchaser for any compensation accruing to a third party"

should be decided by a larger Bench in view of the conflicting opinions among different High Courts. That is how this matter has come before us for decision.

The appellants filed M.A.C. No. 65 of 1990 (297/88) before the Second Motor Accident Claims Tribunal (Southern Division), Berhampur u/s 110-A of the Motor Vehicles Act, 1939 claiming compensation to the tune of Rs. 50,000/- for the death of their son in a motor vehicle accident on 23-10-1988. The Tribunal in its judgment dated 23-3-1992 came to hold that the accident resulting in the death of the deceased was caused due to the rash and negligent driving of the offending vehicle by its driver. It further held that the deceased boy was aged about 9 years at t.he time of the accident and having regard to the facts and circumstances, it was of the view that a consolidated amount of Rs. 15,000/- would be the just compensation payable to the appellants. The Tribunal further held that respondent No. 8 K. Krishna Murty was the owner of the offending vehicle who had transferred it in favour of respondent No. 1 Bijaya Kumar Mohapatra on 20-4-1988, i. e. prior to the date of accident and as the real owner of the offending vehicle transferred the vehicle, the liability of the insurer to cover third party risk ceased. The Tribunal accordingly absolved the Insurance Company from its liability to pay compensation. Being aggrieved by the said judgment, the appellants have filed this appeal on the ground of inadequacy of compensation as well as absolving the* Insurance Company from its liability.

The point raised by the learned Single Judge came up for consideration recently before the Supreme Court in G. Govindan v. New India Assurance Co. Ltd. A. I. R. 1999 S. C. 1292, After considering the conflicting opinions of different High Courts on the issue, their Lordships have approved the ratio laid down by the Full Bench decision of the Andhra Pradesh High Court in Gade Sreeramulu Vs. Matta Adinarayana Rao and Others, in which it has been held that non-transfer of policy in the name of the transferee of the vehicle cannot be a ground for denial of compensation by the insurer. In paragraph 13 of the judgment, the Supreme Court further clarified that both under the old Act and the new Act. the Legislature was anxious to protect the third party (victim) interest and what was implicit in the provisions of the old Act is new made explicit. The aforesaid being the legal position, we set aside the finding of the Tribunal and hold that the Insurance Company is liable to pay compensation to the appellants.

The matter is now remitted to the learned Single Judge for disposal of the appeal on other points.

Ch. P.K. Misra, J.

I agree.

Ordered accordingly.